Key Highlights

Despite a tough year 2017 due to GST and other facors, the company achieved a volume growth of 5%, largely due to new products and innovations.

Management initially expected a volume growth of around 8-10%, but the pull back of demand in various sectors led to only a 5% growth.

Demand for some of the sectors that the company caters to like transformers, motors, consumer durables, construction chemicals side were very muted. On the other hand demand from some sectors like automotive, industrial floorings, coatings, logistics were good which helped the company to sail through.

Overall, the demand of the company's products is linked to the IIP growth. While the directions is same, its generally higher than IIP due to company's vast product portfolio and niche presence.

Company imports some of its key raw materials from China and rupee depreciation is negative for the company as its net importer.

Raw material prices have increased in H2 CY 17 largely due to feedstock issues. The company will take corrective price increases in CY 18. It has raised prices from April onwards.

Does not expect raw material prices to increase beyond this level and expects the price to remain steady around this level.

Company has still not seen any big impact of GST or make in India or reduction in imports from China so far. These are significant changes and if they go on an expected line, then will benefit the company significantly.

Paint and plastic additives is one such product line which will be introduced in next couple of years. Parent has nearly a billion Euro of revenues from this segment and is very strong in technology and R&D.

The company continued to operate at around 75% of installed capacity. It will spend around Rs 20 crore on R&D including R&D infrastructure and realignment of some of the products.

Export to Parent stands at around 5% and most of the exports are to South Asian countries. This will increase with more and more R&D lead new products being introduced by the company in India.

Going forward, management expects the company to do well due to more product introduction from the Parent and better prospects for electrical industrial and power segment.

Expects CY 18 to be better year. Growth will be more from H2 of the year, but overall growth should be better both in volumes and some price increase will lead to better margins.

Most of the impact of CY 17 is over and growth should return to normalcy although it will not be in a linear form in CY 18.

Expects good volume and value growth for next couple of years driven by existing products, new products and higher exports.